Medical device maker Tornier(NASDAQ:TRNX), which makes orthopedics products for extremities including the shoulder and ankle, announced Friday that it is acquiring OrthoHelix Surgical Designs, an Ohio company, for $135 million.
Tornier, based in Bloomington, Minnesota, said that it will make additional payments over two years based on the acquiree achieving certain revenue goals. The transaction was funded mostly by cash with only $35 million coming from Tornier’s stock.
OrthoHelix makes a number of specialty implantable plates and screws. The company expects to garner revenue of $29 million in 2012 and that projection is a 30 percent increase over revenue gained in 2011.
The acquisition will help Tornier gain more traction with lower extremity surgeons who focus on the foot and ankle, and the company also hopes to double its lower extremity revenue.
“The transaction will enable us tosubstantially expand our sales coverage of foot and ankle surgeons, significantly enhance our addressable lower extremitymarket opportunity, and position us to achieve more consistent growth across our upper and lower extremity product categories,” said Douglas Kohrs, Tornier’s president and CEO, in a news release.
In the quarter ended July 1, Tornier’s lower extremity sales of $6.5 million was nearly six times lower than its upper extremity revenue of $43 million.
After the transaction is complete, OrthoHelix will continue to operate under the same name and retain all of its branding as it relates to its products. All 80 employees will be retained, the press release noted.
In the three months ended July 1, Tornier had revenue of $66 million, up from $65.2 million in the same period a year ago. Net loss in the quarter widened to $5.1 million, or 13 cents per diluted share, up from $2.9 million, or 7 cents per diluted share in the same period in 2011.
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